Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1887-12-23
Condition of the Bond Litigation.

EDS. RECORD UNION: propose through
your paper to say few words about the
litigation in which the city is at this time
involved. In the case of Max HausmeiSter
against Porter the suit was brought to com.
pei Porter, as City Treasurer, to pay into
the sinking and interest fund of the city
fifty-fve hundredths of the gross income
from water rates, and also fifty-five hun
dredths of the income from various special
taxes into the same fund. But on the final
trial of the cause in the Superior Court the
plaintiffs lawyers abandoned their claim
for the 80 per cent. of the special funds,
and confined themselves TO the demand oil
the fifty-fiye hundredths of the gross pro.
ceeds from water rates. 1t was on this lat
ter point alone the Superior Court passed
The question about the So per cent. of the
special funds dropped out of the case, and
will probably never again be raised, unless
our Trustees do something particularly I'M
wise and imprudent TO again revive it. The
next suit is that of Daniel Meyer against
Porter, to compel him to set apart for the
sinking and interest fund all the money
that was in the Treasury at the end of the
fiscal year, March 81, 1887, | believe (possi-
bly it was March, 1856, and all the money
that might remain in those funds at the
end of each fiscal year thereafter. Under
the Bates decision undoubtedly the Court
will hold it can make no order in regard
to the money already expended. l have
but little doubt the Supreme Court will
order the money remaining in those funds
at the end of each fiscal year hereafter to
be paid into the sinking and interest fund.
But such an order, whilst it would do Mr..
lxr
the city. The money of each fund would
after such decree, always be spent before
the 31st of March, so there would be moth
ing to pay over to the interest and sinking
fund. But the Treasury having been
drained in March, there would be nothing
to pay the current expenses of the city IN
til say the middle of May, when the new
taxes come IN.
If our Trustees could be induced TO pur-
suea common-sense and conciliatory course
Meyer might be induced to dismiss this
suit.
The next suit shall allude to is that Of
George +. Bates against certain city officials
to compel them to refund certain old city
bonds that were made refundable under
the Act of 1864, but were never presented
these old bonds outstanding, and it canno
seriously affect the interests of the city
however it may be decided.
The next suit is one of Sam Davis agains
| the city to recover interest on coupons o
1876 and subsequent to that date. Thi!
suit is of immense importance TO the city
A decision of that question in favor o
| the city will give a bigger boom than al
| the advertisements and newspaper puff
that can be written and printed in the mex
| five years. On the other hand, a decision
against the city on this point, without am
preparation for it, will be extremely dis
asterous. There are now outstanding
| $4,000 Of past due coupons, worth a
present prices about 100000 but if tn
| Court decides that they bear interest from
the time they were due, the coupons ant
interest would be worth about 100000 il
cash, and could be put in judgmen
against the city, bearing per cent. interest
There will also be 1921 900 of bonds du
| in February, 1888, which will have ceaset
| by their terms to bear interest. But if thi
suit is decided in favor of Davis they cal
| be put into an interest bearing Judgment
Say by the time judgment was rendere,
this debt would be $350,0o0, bearing pc
cent. interest. So here would be 81 $4,000
of judgment due and bearing interest, be
sides $500, 600 or 100000 of old bonds out
standing and bearing interest.
| fortunately, 90 not tnlnk tnere is on
chance in twenty for this suit being decide,
against the city. l think the whole ques
ton of interest has been decided by tn
Supreme Court, and / cannot see on wha
grounds Davis and his counsel hope t
succeed. If there ever is any such decis
ion it will certainly be several years befor
it is finally rendered, and the citizens c
this city can, if they choose, protect them
selves against any possible disaster b.
making a small sacrifice during the year
| 1889 and 1880 HI O. BEATTY